The Values of Private Law lecture series with with Ernest Lim

About the speaker

Ernest Lim is a Professor of Law and Vice Dean at the Faculty of Law, National University of Singapore (NUS). He received his DPhil (PhD) and BCL from the University of Oxford, LLM from Harvard Law School and LLB from NUS. He is a Research Member of the European Corporate Governance Institute (ECGI). His research is concerned with how corporate governance and private law can and should be used to promote social and environmental good. To that end, he has published three monographs with Cambridge University Press: A Case for Shareholders’ Fiduciary Duties in Common Law Asia (2019), which won the joint second Society of Legal Scholars Peter Birks Prize for Outstanding Legal Scholarship; Sustainability and Corporate Mechanisms in Asia (2020), and Social Enterprises in Asia: A New Legal Form (2023). He is also interested in the implications of corporate governance and private law for AI and sustainability. He is co-editor of The Cambridge Handbook of Private Law and Artificial Intelligence (Cambridge University Press, 2024) and is co-editor of The Oxford Handbook of Climate Change and Private Law (Oxford University Press, 2026 forthcoming).

Abstract

Ernest Lim analyses whether directors are required to consider the economic, environmental, and climate impacts of a company’s operations, even when these considerations do not directly benefit firm-specific shareholders financially. He contrasts this "external dimension" of directors’ duties with the traditional focus on maximizing shareholder value, identifying the rise of diversified investors, the EU’s sustainability regulations, and the significant emissions from state-owned enterprises (SOEs) as key factors driving the push for a broader perspective.

Lim examines and ultimately rejects the effectiveness of incorporating environmental-related provisions into corporate constitutions or relying on directors to act on shareholder preferences as sufficient means to address external impacts. He argues that these approaches often remain constrained by the principle of shareholder primacy. Instead, he proposes that SOEs in countries such as China, the Nordic nations, and certain Western European states offer a compelling case study. In these enterprises, the state functions both as a controlling shareholder and a diversified asset owner. According to Lim, this dual role supports the view that directors should take into account broader economic and environmental impacts. Doing so, he contends, aligns directors' fiduciary duties with the state’s responsibilities as both controller and asset owner, offering valuable insights for broader corporate governance debates.